“The stock market may not bring you undreamed-of rewards, but if you are willing to get rich slowly, it is the place to make or maintain a fortune,” said Al Frank 31 years ago. Zimmer Biomet Holdings Inc. (ZBH) is a stock to consider, suggests John Buckingham, editor of The Prudent Speculator.
As The Prudent Speculator celebrates its 49th anniversary this month, that admonition from our founder remains true today, even as there have been plenty of bricks added of late to the proverbial Wall of Worry that equities have long climbed.
Zimmer is a global leader in musculoskeletal healthcare. It offers a wide portfolio of orthopedic implants and surgical solutions, particularly in hips and knees where it maintains dominant market share.
Zimmer Biomet Holdings Inc. (ZBH)
Growth has been supported by broader surgeon adoption of cementless systems and the ROSA robotics platform, as well as expansion into faster-growing categories such as upper extremities and craniomaxillofacial products. Management continues to integrate Paragon 28 in foot and ankle while advancing Monogram’s mBos semi-autonomous robotic system to improve precision in knee replacements.
Although some worry that GLP-1 weight loss drugs could reduce long-term joint replacement volumes, Zimmer believes demographic factors like aging populations and expanding access to care will offset that risk. Strong cash generation and disciplined spending support further M&A and share buybacks, while the valuation near 12 times earnings remains well below the historical norm near 20.
